Lead Opinion
IsAppellants GGNSC Arkadelphia, LLC d/b/a/ Golden Living Center-Arkadelphia, and others, bring this interlocutory appeal from the order entered by the Ouachita County Circuit Court certifying a class action filed by appellees Nellie R. Lamb, by and through Richard Williams, as guardian of the estate and person of Nellie R. Lamb, and others. For reversal, appellants contend that appellees did not meet their burden of proving the predominance of common issues for the certification of the class. They also argue that class adjudication is neither efficient nor fair and that the class definition is flawed. We affirm the circuit court’s decision.
I. Factual Background
The appellants in this case are twelve nursing-home facilities doing business as Golden |fiLiving Centers in cities throughout the State of Arkansas.
Following the initial complaint and also after filing the second amended complaint, 17appellees moved for class certification of the three claims. Appellants opposed the motions, and the parties briefed the contested issues. After conducting two hearings, the circuit court entered an order granting class certification on July 11, 2014. The court defined the class as,
All residents and estates of residents who resided at the Golden Living nursing homes in Arkansas from December 2006, through July 1, 2009. Excluded from the Class are (1) residents that have sued in the past or presently have lawsuits pending against any of the Defendants except the plaintiffs named herein; (2) all present and former employees, officers, directors, of Defendants; (3) any Class Member who timely elects to be excluded from the class; and (4) any employee of the Circuit Court of Ouachita County, Arkansas, or any officer of any court presiding over this action.
In its order, the court noted that the class exceeded 3,400 residents. Further, the circuit court found that commonality was established because the central issue affecting both the named plaintiffs and the putative class is whether appellants’ alleged business practice of chronically un-derstaffing the nursing homes breached the standard admission agreement and violated the Residents’ Rights Act, as well as the ADTPA. In particular, the circuit court found that the issues common to all class members included,
A. Whether Defendants’ standard admission agreement imposes minimum-staffing requirements;
B. Whether Ark.Code Ann. § 20-10-1201, et seq. imposes minimum staffing requirements;
C. Whether Defendants failed to meet the minimum staffing requirements of Ark.Code Ann. § 20-10-1201, et seq., and the Defendants’ standard admission agreement;
D. Whether failure to meet the minimum staffing requirements breaches the standard admission agreement;
E. Whether failure to meet minimum staffing requirements violates Ark.Code Ann. § 20-10-1201 et seq.;
|SF. Whether failure to meet minimum staffing requirements of Ark.Code Ann. § 20-10-1201 et seq., is a violation of the Arkansas Deceptive Trade Practices Act; and
G. Whether Leslie Campbell, Cindy Susienka, James Avery, Andrea Clark, David Mills, Julianne Williams, David Stordy, Larry McFadden, Angela Mar-lar, Billie Palculict, Sybil Adams, Troy Morris, Avie Singleton, Tracey Burlison, Mincie Thomas, Tommy Johnston, John McPherson, Laurie Herron, Margaret Green, Noreen Bailey, Marsha Parker, and Lisa Hensley are control persons as defined in Ark.Code Ann. § 4-88-113(d)(1) and therefore jointly and severally liable for the damages suffered by the plaintiff class.
Based on this court’s precedent in Beverly Enterprises-Arkansas, Inc. v. Thomas,
II. Standards of Review
At the outset, we note that class certification of a lawsuit is governed by Rule 23 of the Arkansas Rules of Civil Procedure. Circuit courts are given broad discretion in matters regarding class certification, and we will not reverse a circuit court’s decision to grant or deny class certification absent an abuse of discretion. ChartOne, Inc. v. Raglon,
Our law is well settled that the six requirements for class-action certification, as stated in Rule 23, are (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5) predominance, and (6) superiority. Gen. Motors Corp. v. Bryant,
IÍI. Predominance
As their primary issue on appeal, appellants contend that the circuit court abused its discretion by finding that the issues common to the class predominate over individual issues. In this regard, appellants assert that the questions of causation and injury are foundational elements of all the claims and that class certification is improper because these issues must be resolved on an individual basis. They maintain that for each claim, whether it be the alleged breach of admission agreement or alleged violations of the Residents’ Rights Act and the ADTPA, appellees must prove a causal connection between the allegation of understaffing and 1 inany resulting injury. Appellants contend that the experiences and injuries of the residents are varying and that individualized proceedings will be necessary to determine if any alleged injury was proximately caused by understaffing. In making this argument, appellants rely on the affidavit of Elaine Townsley, a registered nurse who is familiar with staffing requirements of long-term-care facilities. She averred that “not all residents are affected the same by a facility’s failure to meet minimum staffing requirements for a particular shift” and that some residents may “suffer no injury as a result of this failure to meet minimum staffing requirements.”
Rule 23(a)(2) provides that a representative party may sue on behalf of a class only if there are “questions of law or fact common to the class.” “When the party opposing the class has engaged in some conduct afflicting a group that gives rise to a cause of action, one or more of the elements of that cause of action will be common to all of the persons affected.” Faigin v. Diamante,
In Thomas, supra, the plaintiffs pursued a class-action suit against a nursing home located in Batesville. The complaint asserted that, pursuant to the facility’s admission agreement, as well as the Residents’ Rights Act, the nursing home was obligated to take care of the residents’ basic daily needs and that the nursing home had failed to meet this obligation by neglecting to properly and adequately staff the facility. The circuit court granted class certification, finding that the common issues predominated over individual ones. On appeal, the nursing home argued that the circuit court erred by certifying the class because the identified questions of fact could not be resolved without a detailed examinations of the individual circumstances of each class member and because the predominant issues raised involved only individualized issues of liability, causation, and the existence and extent of | ^injury for each class member. This court rejected the nursing home’s argument and affirmed the class-certification order, holding as follows:
We conclude that one main and preliminary overarching issue does exist in this case, which is whether the Bates-ville nursing facility was chronically understaffed so as to violate the residents’ statutory and contractual rights. In its order, the circuit court found thirteen questions of fact and law and five issues that must be resolved, which are common to all class members. The five issues all involved understaffing. The court then found that the common factual and legal issues predominated over the individual issues because all residents relied upon the same Resident Admission Agreement and statutory law to assert that systemic understaffing resulted in undignified living conditions for the residents, which breached that agreement and violated state law. The circuit court recognized that once these predominating issues were resolved, the class could be decertified, if necessary, to determine individual restitution and damage issues for class members for breach-of-contract and statutory violations.
We hold that the circuit court did not abuse its discretion in determining that the overarching issue of understaffing is common to the class and may be resolved before individual issues of damages must be addressed. The predominance criterion is satisfied in this case.
Thomas,
Here, appellants acknowledge that in Thomas we rejected essentially the same arguments appellants raise in the instant appeal. However, they contend that the circuit court misplaced its reliance on Thomas in light of subsequent case law. Appellants assert that the law as it has been developed since Thomas precludes class certification where causation and injury are foundational elements to a determination of liability and where there is no one set of operative facts to establish a defendant’s liability to the class members. Specifically, appellants suggest that the holding in Thomas has been eroded by the decisions in Bedell v. Williams,
|1sIn Bedell, this court held that causation is an element necessary for the recovery of damages under the Residents’ Rights Act and that the circuit court erred by not including the element of causation in the jury instructions. In Hernandez, the circuit court denied certification of a subclass of apartment dwellers who asserted tort claims arising from carbon monoxide exposure allegedly caused by the flawed design of HVAC and hot-water systems in the apartment complex. We affirmed that decision on the basis that proximate causation is a “foundational element” of the asserted torts of strict liability, negligence, wrongful death, and outrage. Hernandez,
Contrary to appellants’ assertion, this court broke no new ground in either Hernandez or Vickers. In each case, we referred to our decision in Baker, supra, a mass-tort action filed against manufacturers, suppliers, and distributors of certain diet drugs, alleging claims for [ unegligence, products, liability, failure to warn, and breach of warranties. The plaintiffs in that case argued the predominance of common issues, such as whether the diet drugs were defective products and whether the defendants gave adequate warning of the risks associated with taking diet drugs. However, the circuit court denied class certification. This court affirmed, holding that “this case presents numerous individual issues that go to the heart of the defendants’ conduct, causation, injury, and damages such that the defendants’ liability as to each plaintiff will have to be resolved on a case-by-case basis.” Baker,
The common thread in Hernandez, Vickers, and Baker is that in each of those cases there was no overarching issue common to the class that would establish the defendants’ liability. Instead, the defendants’ liability depended on an examination of facts that were peculiar to each class member. By contrast here, there are core issues common to each class member on the issues of liability concerning (1) whether appellants had a duty to provide appropriate staffing pursuant to the admission agreement and the Residents’ Rights Act; (2) whether a 1 ^violation of the residents’ rights establishes liability under the ADT-PA, and (3) whether appellants failed to meet the statutory and contractual obligations by chronically understaffing the facilities. Answering these common questions has the capacity to “reveal the possibility for a claim against [appellants], or wipe out the possibility of a claim for every class member.” Snowden,
Furthermore, our decision in Thomas stands on solid footing as reflected in both prior and subsequent case law. Before that decision, we had observed that there is a distinction between the individualized issues of recovery and common issues of a defendant’s overall liability:
Challenges based on the statute of limitations, fraudulent concealment, releases, causation, or reliance have usually been rejected and will not bar predominance satisfaction because those issues go to the right of a class member to recover, in'contrast to underlying common issues of the defendant’s liability.
SEECO, Inc. v. Hales,
Given the distinction we have drawn between individualized issues of liability and ultimate recovery, it is apparent that appellants have taken out of context our observations in Hernandez that causation is a foundational element of tort liability and in Vickers that class treatment is inappropriate when there is no one set of operative facts to establish liability. In those cases, the element of predominance was not satisfied because liability could not be established without individualized inquiry. In other cases, like Thomas, class certification may be proper when issues of liability are common to the class and predominate over individualized issues regarding a class member’s right to recover damages. When we apply our precedents here, the common, overarching issues concern whether appellants have liability for chronic understaffing under the admission agreement and the asserted statutes. These central issues can be decided on a classwide basis, and they manifestly predominate over individual issues concerning a class member’s right to recovery, which can be determined in bifurcated proceedings. The circuit court did not abuse its discretion in concluding that the element of predominance was satisfied based on the common issues of establishing liability.
Appellants also contend that predominance is defeated because five of the forty-three |17named class representatives and some of the putative class members may have entered into optional arbitration agreements. Citing Sanders v. Robinson Humphrey / American Express, Inc.,
In addition, appellants assert that class treatment is inappropriate regarding the claim that is based on the admission agreement. They argue that preliminary issues of whether each class member had a contract with appellants and whether those contracts were standard, identical, or substantially similar must be resolved before it can be determined whether any such agreement was breached. We cannot agree. Throughout the proceedings, ap-pellees maintained that appellants used a standard admission form at each facility. Appellees based this assertion on representations made by appellant Leslie Campbell, a ranking corporate officer of the facilities. Although appellants disputed this assertion by presenting evidence of other admission agreements, the circuit court did not abuse its discretion, as the court could rely on the representation made by Campbell. Moreover, appellants have failed to demonstrate that these other agreements are materially different from the standard admission agreement [ 18submitted by appellees.
IV. Superiority
In challenging the circuit court’s superiority finding, appellants continue to assert that individual issues dominate those common to the class. They maintain that the bifurcated process is not feasible in this case because a phase-one class proceeding focused on the question of understaffing at twelve different facilities over a two-and-one-half-year period covering 944 days and 32,031 unique shifts makes the class approach unworkable. They contend that, because it is necessary to determine injury, causation, and damages on an individual basis after decertification, the determination of understaffing will create practical difficulties for the circuit court in managing the case as a class action.
This court has repeatedly held that the superiority requirement is satisfied if class certification is the more efficient way of handling the case and is fair to both sides. Rosenow, supra. The avoidance of multiple suits lies at the heart of any class-action decision. Id. Furthermore, where a cohesive and manageable class exists, we have often held that “real efficiency can be had if common, predominating questions of law or fact are first decided, with cases then splintering for a trial on individual issues, if necessary.” Snowden,
Also, this court has repeatedly recognized that conducting a trial on the common issue in a representative fashion can achieve judicial efficiency. Bryant, supra. Furthermore, we have routinely stated that the bifurcated process of class actions is consistent with Rule 23(d), which allows the circuit court to enter orders necessary for the appropriate management of the class |]9action. Id.
We hold that the circuit court did not abuse its discretion in finding that the class-action approach is a superior method for resolving the question of appellants’ liability. As we said in Thomas, “[t]he most efficient way to handle this ease is to certify a class to determine the issue of whether Beverly systematically and chronically understaffed the Batesville nursing facility and then to decertify the class, if necessary, to determine individual restitution and damage claims as well as any defenses in separate proceedings.” Thomas,
V. Class Definition
As their final point on appeal, appellants contend that the class definition is fatally overbroad and imprecise because it does not limit the class to members who suffered an injury and sustained damages as a result of understaffing. This argument is decidedly without merit.
Before a class can be certified under Rule 23, the class description must be sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member of the proposed class. Baptist Health v. Hutson,
Appellants misstate our case law as requiring that a class must be defined to limit membership only to those who have sustained actual harm. What we have said, many times, is that “[cjlearly defining the class ensures that those people who are actually harmed by a defendant’s wrongful conduct will participate in the relief ultimately awarded.” Hutson,
Affirmed.'
Notes
. The facilities are located in Arkadelphia, Camden, Crossett, El Dorado, Harrison, He-ber Springs, Hot Springs, McGehee, Monticello, North Little Rock, and Rogers.
Dissenting Opinion
dissenting.
The majority observes that if a case involves preliminary, common issues of liability and wrongdoing that affect all class members, the predominance requirement of Rule 23 is satisfied and that the question becomes whether there are overarching issues that can be addressed before resolving individual issues. Here, the majority concludes that there are core issues common to each class member on the issues of liability concerning (1) whether appellants had a duty to provide appropriate staffing pursuant to the admission agreement and the Residents’ Rights Act, (2) whether a violation of the residents’ rights establishes liability under the Arkansas Deceptive Trade Practices Act, and (3) whether appellants failed to meet the statutory and contractual obligations by chronically understaffing the facilities.
Thus, rather than asking whether the members of the class have preliminary common issues that predominate, the majority instead considers the more abstract question of whether Inhere exists a newly fashioned cause of action by which a person might seek recourse for any liability and wrongdoing. In doing so, it permits class certification by resort to abstract questions.
The proper approach is that seen in Union Pacific Railroad v. Vickers,
Thus, I respectfully dissent.
Wood, J., joins in this dissent.